Friday, May 29, 2015

The goal of The ObamaTax was to extend health insurance (and thus, presumably, health care) to the minority of Americans without it. It's been an article of faith that the subsidies are what will drive that goal. The Supreme Court has yet to rule on Halbig (etc), but that hasn't stopped the chattering class from opining on what a tragedy it will be if they strike down the government's (illegal) extension of subsidies to residents of states using the 404Care.gov Exchange.

But there's another side to this, one which has thus far gone unremarked: is there a potential upside to folks whose subsidies go away? Turns out, there likely is. In fact, the case for enforcing the law train-wreck as written is pretty strong:

"[A] new report ... says that these critics are looking at only one side of the equation ... the claim [is] that 8 million will lose insurance assumes that everyone who loses subsidies in the federal exchange would cancel their health plans."

While it's likely that many - perhaps most - would, in fact, opt for the (toothless) penaltyfine tax, it's by no means certain that all of these folks would bail. After all, as IBD points out, most of these folks were already paying for insurance before the ObamaTax. It seems reasonable, then, to presume that a good portion of them would suck it up and continue paying unsubsidized premiums.

But wait, there's more:

"[P]eople in [the affected] states would be eligible to enroll in low-cost catastrophic plans, something that they can't do now without also paying the individual mandate penalty."

This is key: many folks really just want/need catastrophic cover, without unnecessary (and expensive) bells-and-whistles.

As an aside, this would be a perfect opportunity to expand HSA eligibility to these types of plans. Hint, hint.

Perhaps the greatest benefit is the one least discussed:

"Getting rid of the subsidies has benefits, too: Namely, both the individual and employer mandates would get flushed away with them."

How's that, you ask?

Well, if getting rid of the subsidies renders coverage "unaffordable" (an ACA "term of art"), then the penalty no longer applies, thus saving consumers even more money. In fact, the "study finds that 11.1 million people will be free of the individual mandate, and more than a quarter million businesses will be liberated from the employer mandate" if the plaintiff prevails: "No subsidies, no mandate."

Four words I can get behind.

Oh, and the other upside?

That would be the north of 230,000 new jobs, plus higher pay for both full- and part-time workers.

So what's the rub?

Well, all of these goodies likely go away if the rocket surgeons in Congress decide to "fix" the ObamaTax instead of deleting it. What are the odds of that?

And at "a whopping 22.5 percent of the total estimated $2.76 trillion in all federal government spending for the Affordable Care Act," it's just one more example of the way that the ObamaTax continues to hurt the very folks it was ostensibly passed to help.

BONUS: The rocket surgeons that wrote the report itself continue to buy into the long-since-debunked idea that Medicare "has overhead of just 2 percent." They then use this faulty "data" to justify the move to single-payer.

Wednesday, May 27, 2015

Got a call this morning from the daughter of one of our agency's long-time clients. In addition to his auto and home, my long-since-retired colleague had written a life insurance policy for him. As the official "Life/Health guy," it fell to me to get the ball rolling on the claim, so I called the carrier's home office to get that started.The first question I always ask is "is the policy in force?" That is, is it still active and thus able to be paid out. The answer is almost always "yes," and then I start asking about beneficiaries, face amounts and the like.So I was a bit startled when the customer service rep said "no, that policy was cancelled at the insured's request."Whoa.In fact, the cancellation request came in almost exactly a year ago. Of course, unless he was being treated for a terminal illness at the time, it seems unlikely that the insured knew that this was, perhaps, premature. I have no idea why he cancelled the plan; perhaps he had adequate coverage with another agent, or it had grown unaffordable, or some other reason. All I know is that it's now my sad duty to let his daughter know that there's going to be no payout from that policy.'Tis a shame.

Fast forward 4 years, and despite the success of these ventures, and the swelling population of drivers and fares customers, many of the same issues remain. In fact, the very first sentence of this post contains an egregious error: it ain't "ride sharing," which sounds more like car-pooling than what Uber, Lyft, et all actually comprise, which is ride selling (and buying).

These transportation networking companies (TNCs) are, for purposes of insurance, pretty much taxi (or livery) services, and your personal auto policy isn't designed (or priced) to reflect that. The TNCs may offer some protection through a corporate liability policy, but that may apply only when a driver is actively engaged in transporting a customer.

■ How much coverage is actually available when the driver does have a fare?■ How will your insurer react if you have a claim?■ What happens if you don't tell your agent?

And more. Unsurprisingly, I tend to fall in the "better safe than sorry" camp.[Hat Tip: P&C Guru Bill M]

UPDATE: Home Office friend of mine sent me this:

"Just saw your post. We've been discussing this issue (Uber, etc); currently our view is that there are 3 stages of Uber: 1) you are listed as available, 2) you accept a pickup request, and 3) you pick up the customer and take him/her to the destination. If an accident occurs during #1, there is coverage. If an accident happens during #3, no coverage. During #2, very grey area."

Thanks! Color me (still) skeptical, though: seems to me that stages 1 and 3 still make one a taxi/livery service (else why advertise "availability?"). But hey, I'm a simple unfrozen caveman lawyer life and health guy.

Tuesday, May 26, 2015

I see trouble on the way.
I fear rivers over flowing.
I hear the voice of rage and ruin.

Obamacare news isn't good.

According to states that have released rate requests, New Mexico’s market leader Health Care Service Corp. is asking for an average premium spike of 51.6 percent; Tennessee’s top insurer BlueCross BlueShield of Tennessee wants an average spike of 36.3%; Maryland’s market leader CareFirst BlueCross BlueShield is requesting an average spike of 30.4%; and Oregon’s top insurer, Moda Health, is seeking a 25% spike. - Breitbart

"Artificially shortened life-expectancy figures supplied by the company convinced investors that their returns would be greater ... [LP] charged massive undisclosed fees and misrepresented the company’s business practices."

For the last 5+ years Humana has been my "go to" carrier for individual health insurance. Although I

have scaled back my under 65 health insurance business, I still used them almost exclusively throughout 2014 and 2015.

This will be my last year to write any traditional health insurance. After 40 years in this business, switching from large employer group plans to small group and individual coverage, starting in 2016 and going forward my focus will be exclusively helping those age 65 and older searching for answers to their questions about Medicare.

Humana has been good for my clients, and mostly for me as well, but it is not without hiccups.

Through all of the changes that have occurred in this industry, and internal changes at Humana, they have been rock solid.

But it appears their days are numbered, at least with regard to individual health insurance in Georgia.

Georgia is Humana Inc.’s second-biggest market for insurance policies sold under the health law, and the home of what may be its biggest misstep. The company is now attempting a turnaround as it tries to make its strategy of selling coverage directly to consumers a success.

This can't be good news for Georgia residents that currently have Obamacare plans through Humana.

Until now, Humana has not only had competitive rates and good value but has also had the broadest access to health care.

While other carriers focused on skinny provider networks, Humana continued to deliver almost unfettered access to a large number of medical providers throughout the state.

Apparently that will end come 2016.

For the last 2 years Humana sold a significant number of policies to individuals that order health insurance from the dollar menu. They wrote a lot of off-exchange business (which is all I do) but also gobbled up more than their share of subsidized policyholders.

Humana, which touts its skills at selling health insurance directly to individuals, ran into trouble in Georgia after charging too little for plans it sold on the state’s new marketplace. Customers came running.

Unfortunately, more of them were sicker than Humana expected. Flooded with patients, Humana let them see doctors who aren’t in its networks. That’s expensive -- health insurers make deals with doctors and hospitals to add them to their networks, negotiating lower prices in return for business.

The out-of-network generosity cost the insurer.

Non-par claims are not the only thing that sunk this ship.

Under Obamacare non-par claims are paid at the same rate as par claims. There are no consumer penalties for using providers outside the network.

But when a policyholder does use a non-par provider that provider is allowed to balance bill and the consumer is on the hook for the differential.

If Humana withdraws from states like Georgia, “then you’ve wasted all your time and effort in building a business that goes away.”

That same argument is not just limited to Humana, this is true for anyone, including agents, that are still hanging on to the hope that change will be good for them.

Some will argue that Obamacare was designed to unravel the current health care financing system and drive agents from the industry.

Looks like it is time to hang a "Mission Accomplished" banner over the White House.

Wednesday, May 20, 2015

March 23, 2010 was an historic day for health insurance in America. It was on this day
when we all rejoiced knowing that Obamacare was going to reduce the average
premiums for a family of four by $2500. It was going to help small businesses find affordable options to offer employees. It was going to eliminate "junk" insurance policies. Employees were told that if they liked their plans they could keep them.

So how has this Obamacare thingy helped my
small company:

We have seen an overall decrease in benefits since 2010.

From
November 2010 to our current plan year premiums have increased 58.7%.

If we
would have been forced to an Obamacare compliant plan the increase would have been 116.7%

That 36% hike in Tennessee was the high water mark this time 'round; Beaver State carriers are seeking a more modest 24% increase. Folks in Connecticut get a break, with average rates increasing just shy of 8%.

Now, there are some that would argue that this is to be expected, and can't be totally the fault of The ObamaTax.

These folks would be wrong, it is 100% attributable to the train-wreck:

Friday, May 15, 2015

The Volunteer state is also known as Big Orange Country but it is about to turn red because of Blue.

BlueCross BlueShield of Tennessee has filed to increase its health insurance premiums for 2016 individual plans by 36 percent, on top of a 19 percent increase approved last year. - Nashville Post

Ouch!

How did this happen?

When insurers were tasked with pricing a brand new insurance marketplace in 2013, many had to make their best guesses as to both the frequency and severity of claims stemming from newly covered people.

In Tennessee, BlueCross BlueShield shot too low. Last summer, Vice President of Corporate Communications Roy Vaughn said the insurer could lose "tens of millions of dollars" in its first year of ACA coverage. At that time, the insurer commanded about 88 percent of the federal insurance marketplace in Tennessee.

How would you like to do your job, whatever it is, blindfolded and hands tied behind your back?

OK, let's say you are not one of the Flying Wallenda's, but just have an ordinary, everyday job.

How well could you perform your duties?

My guess is, not very well.

But that is what Obamacare did to the health insurance carriers.

“The guaranteed-issue aspect of the ACA essentially negates underwriting,” Stark said, referring to Obamacare rules requiring health insurers to allow anyone to enroll, even if they’re already sick. “Health insurance companies have struggled with plan pricing for the past few years because they now must sell to anyone, regardless of preexisting conditions.

“Additionally, carriers must include all 10 benefit mandates required in the ACA, all of which potentially drive up plan prices,” Stark said. “Unlike automobile or homeowners insurance, health insurance companies have no control over accepting risk and no control over their insurance product.” - Heartland

The government told the carriers, forget what you have learned over the last 50+ years. You can't do that anymore.

Makes as much sense as the government telling the banks they must issue a mortgage loan to anyone who can fog a mirror.

Thursday, May 14, 2015

A South Carolina man is going blind and blaming Obama for his predicament.

49 year old Luis Lang is a self employed handyman. He has never had health insurance and always paid his own medical bills.

Lang is a smoker with a history of uncontrolled diabetes

Luis Lang learned in late February that he had suffered a series of mini-strokes that left him with bleeding in his eyes and a partially detached retina caused by diabetes

His vision has worsened so much that he hasn’t worked since December, which could put the couple’s $300,000 Fort Hill home in jeopardy along with his health.

“He will lose his eyesight if he doesn’t get care — he will go blind,” said Dr. Malcolm Edwards, an ophthalmologist who has given Lang injections at a discounted rate to control the bleeding. - Raw Story

Lang shunned Obamacare and the exchange, gambling he could always get help in an emergency.

He was wrong.

“(My husband) should be at the front of the line because he doesn’t work and because he has medical issues,” said his wife, Mary Lang. “We call it the Not Fair Health Care Act.”

Lang found he was a month too late to enroll for 2015, and he now earns too little to get a federal subsidy to buy a private policy.

Lang and his wife blame President Barack Obama and congressional Democrats for passing a flawed law – although not even private insurers allow people to forgo payments when they’re healthy and cash in benefits after they’re sick.

As Bob pointed out last month, The Golden State's health exchange (Covered California) continues to burn through tax-payer dollars at an alarming rate. That wouldn't necessarily be a bad thing if, say, they had something - anything, really - to show for it.

"[A] reduced forecast calling for 2016 enrollment of fewer than 1.5 million people."

You'll recall, of course, that the primary purpose of The ObamaTax was to increase the roles of the insured. Adding insult to injury, that pesky first 'A' in PPACA continues to remain out of reach, even with subsidies:

"[H]ealth policy experts said that some uninsured folks still find health insurance unaffordable"

The problem, of course, is that folks who qualify for subsidies still find it difficult to come up with the scratch to cover mega out-of-pocket maximums, and that's when they're successful even finding a provider who takes ObamaPlans.

So, the state is tightening its metaphorical belt:

• Spend $58 million less compared with the current fiscal year, a 15% reduction.• Devote the largest portion, $121.5 million, to outreach, sales and marketing. That's down 33% from the current year.• Maintain the monthly $13.95 fee for each individual policyholder, which would raise $233.2 million in revenue.

I find #2 to be the most ludicrous: sell all you want, if folks can't afford what you're selling, well...

Consolidation remains likely, with CEO Mark Bertolini asserting that government business is the focus for inorganic growth, while compatible cultures for post-merger synergies were viewed as the driver in all transactions, with cheap debt making either Aetna-Humana and Aetna-Cigna meaningfully accretive possibilities and imminent. - Barrons

The next few months could be interesting. How many carriers will actually go to the 2016 prom?

At the time, this seemed kind of a stretch, inasmuch as health insurance companies were forbidden to use these results in their underwriting process (and since group insurance has been guaranteed issue for almost 20 years, it was moot to begin with).

On the other hand, you really can't be too careful, and so we got the Genetic Information Nondiscrimination Act of 2008 (GINA), "which prohibits genetic information discrimination in employment" (the law went into effect the following year). In fact, the law goes even further, in that it also forbids the use of this information as regards benefits (including insurance).

At first glance, this specific use seems to skirt the letter of the law, so it's probably "kosher." As long as the results aren't used to, for example, determine premium contribution or subsidy levels (ie how much of the premium the employer pays*), this seems to be a legitimate use of the data.

Now, the efficacy of using the information in the manner being proposed may indeed be questionable:

"[E]mployee benefits experts have doubts that such a novel approach will gain momentum. It first has to conquer steep challenges like ... employer skepticism about its effectiveness."

That is, whether or not there's actual value there, and whether it's worth the cost of implementation (these tests aren't necessarily cheap, and one presumes that the employer will be footing the bill).

A potentially more serious concern arises as to who will have access to this information, and how secure it will be. But that's another post.

Under the plan, Aloha State residents will be cut off from enrolling in new plans at the end of this week, and be completely shuttered by the end of next February (costing another 73 hard-working Americans their jobs). It appears that Island citizens will be transitioned to the 404Care.gov site for Open Enrollment Season v3.0 beginning this fall.

Monday, May 11, 2015

We've been covering the Massachusetts health insurance Connector since it was merely a gleam in Johnathan Gruber's eyes. So it comes as less than a surprise to us that it continues to implode under the new ObamaTax regime. Thanks to the intrepid Josh Archambault (senior fellow at the Foundation for Government Accountability), we learn that the noose is tightening. Turns out, Bay State Brahmins:

■ Failed to execute a contract with CGI, the vendor hired to build the site, that would track the progress of the project and ensure on-time delivery of a product that included all required features■ Failed to implement a governance structure that would ensure ongoing quality of the project[And worst of all:]■ Attempted to conceal these shortcomings by misrepresenting the progress of the health insurance exchange to a number of stakeholders including the Centers for Medicare and Medicaid Services [among others]

Major no-no there. In fact, their behavior was so egregious that the Feds "have subpoenaed records related to the commonwealth’s ‘connector’ dating to 2010.”

In other words, this is now a criminal matter, with actual fines and (hopefully) jail time potentially on the table.

That is, more people may have insurance (although this remains unproven), but the supply of actual health care remains steady (or is, in fact, falling). So how valuable is your ObamaPlan if you can't find a provider who accepts it?

Then there's the little problem of administering your plan if you're fortunate enough to be able to afford and are successful in actually buying one:

"[T]he back end is still dysfunctional. It’s very difficult for a consumer to conduct a transaction as you would with, say, Amazon.com, that results in verifiable coverage. Pen, paper, and processing time are still required"

During the Great Depression when 1 out of 4 were out of work a song made

popular by Bing Crosby was everywhere on the airwaves.

The song tells the story about a beggar that lost his job and strikes back at "the system" that contributed to his job loss.

They used to tell me I was building a dreamWith peace and glory aheadWhy should I be standing in lineJust waiting for bread?Once I built a railroad, I made it runMade it race against timeOnce I built a railroad, now it's doneBrother, can you spare a dime?

The tune was based on a Russian-Jewish lullaby sung by composer Jay Gorney's mother when he was a child.

Today we have our own challenge, except this one is about health insurance.

Obamacare has turned the health care, and health insurance system on its head. Premiums today are anything but affordable, except to the extremely poor or extremely wealthy.

Everyone else is screwed.

Yesterday I had a call from a woman who would be losing employer group health insurance at the end of the month. They had coverage through her husband's job but that is going away and he will become self employed.

The family of 5, all in good health, are looking for something affordable to replace their group health plan.

Accustomed to paying $200 per month for a good plan that included dental and vision, they needed to get an idea of what was available.

Projected income is over $100,000 so they will not qualify for a subsidy.

Sounds odd doesn't it?

The new system says if you earn less than $100,000 you are poor and need a government handout to afford your affordable health insurance plan.

To replace their existing health insurance plan they will need to come up with $1,115 per month, and that's just for the Gold health insurance plan.

Add another $100 for dental and vision.

That's disgusting.

Comparable coverage before Obamacare would be less than $500 per month.

"[O]fficials are considering raising fees on insurers, asking the state for more money and working with other states to improve their exchange. Connecticut plans to sell advice and strategy to struggling states."

Given its history, seems like the only bit of Connecticut's advice of any value would be on how not to set up or run an Exchange.

But what's remarkable to me is how many folks still don't 'get' that insurers don't pay these fees, and that states don't have money: customers pay the fees, and tax-payers provide the funds.

So the only thing they're going to accomplish is higher premiums (so fewer folks buying or keeping plans) and raising taxes (same same). Where do they think all this money's coming from?

Tuesday, May 05, 2015

When one considers insurance, the majority of claims are paid to 3rd parties. For example, life insurance proceeds are paid to one's beneficiary, auto claims to the body shop, medical claims to a doctor or hospital, and so on.

But three types of plans, all of which are fairly similar, actually pay benefits to the insured. These are (in no particular order) critical illness (CI), long term care (LTCi), and disability insurance (DI).

We haven't blogged much on Critical Illness coverage, which is a shame, because these plans also pay the insured cash benefits for things like heart attacks and cancer. These plans can be particularly useful if one has a high deductible (HSA) plan or one of the newfangled ObamaPlans with sky high out-of-pocket exposures. By providing a quick injection of cash, these plans can mitigate a lot of financial pain.

One third would consider buying disability insurance if they knew more about it

41% would consider buying it if it were less expensive, but perceptions about costs vary considerably

That last is important: many (most?) folks think disability coverage is unaffordable, but seldom check to confirm that by asking for a quote. So if you're one of the 57%, why not check with your employer about a short or long term disability group plan or - better yet - ask your professional, independent agent for a quote.

Three-quarters of emergency physicians say they've seen ER patient visits surge since Obamacare took effect — just the opposite of what many Americans expected would happen. - USA Today

No real surprise there,

So why did it happen?

In addition to the nation's long-standing shortage of primary care doctors — projected by the federal government to exceed 20,000 doctors by 2020 — some physicians won't accept Medicaid because of its low reimbursement rates. That leaves many patients who can't find a primary care doctor to turn to the ER — 56% of doctors in the ACEP poll reported increases in Medicaid patients.

We're not generally in the habit of carrying water for insurance companies, but last week's news about Assurant Health has engendered some confusion. Briefly, Assurant Health is (was?) a subsidiary of a larger company that also owns Assurant Employee Benefits (which sells group non-medical coverage, such as dental and disability).

Unlike its sister company, Assurant Employee Benefits continues to enjoy robust growth and financial stability. According to the carrier:

"Assurant Employee Benefits (AEB) is not exiting the benefits market ... By approaching the sale of Assurant Employee Benefits in this public manner, it allows for us a faster process. The public announcement allows us to be transparent and control the process. We expect to know within a few short months who our new parent company will be."

I've been fortunate to work with some great folks there over the years, and know them to be a solid company. Someday I'll have to tell you about my first death claim with them....